Robbins' Final Pitch: QuintilesIMS

Next on Robbins' List: FMC

Robbins Pitches DXC

Who Get's an 'F' These Days?

Resnick Thinks Frontier Will Seek Bankruptcy Protection

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Robbins' Final Pitch: QuintilesIMS

Lastly, Mr. Robbins is pitching QuintilesIMS, the combination of a drug trials company, Quintiles, and a health technology and data company, IMS. He says that union is well positioned for revenue synergies and applauds the stock buybacks the company has been doing. He thinks that the company's share can return 32% in a year and the returns could get “silly and strong” after that.

He also gets a bit personal, away from his investments, to say he lost his father this past year to cancer and that he's announcing a $1 million donation this year to the Ira Sohn foundation.

David Benoit

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Next on Robbins' List: FMC

Next up is FMC, an agricultural business that just bought the businesses Dow and DuPont divested in an effort to get their merger through.

Mr. Robbins says he already owned FMC before the deal and liked it as a growth story. Now he thinks it’s going to soar. He thinks the business it bought was worth $6 billion but it only paid $3 billion because Dow and DuPont were in a tough spot from regulators, who forced them to sell and sell to a strong competitor.

“That’s like the regulators saying you have to sell your business to someone whose ticker that starts with F and ends with C,” Mr. Robbins said.

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Robbins' First Pitch: DXC

First up is DXC Technologies (ticker: CSC), which used to be known as Computer Sciences before it merged with the services division of Hewlett-Packard Enterprise. Mr. Robbins is praising the management of the business and believes the stock could double in the coming years as earnings grow with the smart combination.

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And We're Off

Mr. Robbins comes on stage wearing a hockey jersey for the team he owns, the Chicago Steel, and throws a right hook at Bill Ackman at the start: I wanted to have the most self promotion since Bill Ackman pitched Howard Hughes for the third time.

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Final Speaker of the Day: Larry Robbins

Ok, up now is Larry Robbins, who we like to note annually is the fastest speaker on the planet. He crams a lot thoughts into his 20 minutes.

Mr. Robbins’ Glenview Capital has a long running bet on Obamacare's impact on the health-care industry and consolidation plays for health insurers that are collapsing. He’s kept quiet amid the wrangling down in Washington to repeal and replace the ACA and the failure of the mergers he championed. Still he has always noted he felt the insurance companies would be good bets on the demographics of health care in this country, even without the deal making.

David Benoit

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Who Get's an 'F' These Days?

It's late in the day, but Mr. Resnick is bringing the fiery rhetoric. It's clear he feels strongly about this one, as evidenced by the fact that's he's had this trade on for a long while.

The result of the company's management flaws, he says, has been poor customer service. It's evidenced by a video he showed at the beginning of the presentation, and what he says is an "F" rating from the Better Business Bureau, he says.

Who actually get's an "F" these days, he asks?

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Resnick Thinks Frontier Will Seek Bankruptcy Protection

Frontier is Mr. Resnick's longest short in his career, he says, but he makes no bones about the fact that he thinks the company is going bankrupt. He thinks the firm is burning cash and may have trouble refinancing its debt in the next few years.

"We've all had our issues with our phone company, but Frontier has taken it to a new level," he said.

Now, to attack the business model: The company earns huge margins on its landline phones, but it's a business in decline, Mr. Resnick asserts. The firm's data and internet business is bleeding market share to cable, he adds. The company's unionized workforce, fixed costs, and high debt load won't help he said.

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Resnick Pitches a Short: Frontier Communications

Mr. Resnick starts by saying he's pitching a short on Frontier Communications Corp. It's a stock that's already down 50% on the year to about $1.50 per share. But he notes that he thinks it has 100% more to drop.

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Next Up: Josh Resnick

Coming up is Josh Resnick, founder and managing partner at Jericho Capital Asset Management, whose focus is on technology, media, and telecom investments. He's had a varied career in venture capital and the corporate world, after getting his start at Bear Stearns.

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Gerstner Pitches United Continental

And Gerstner picks a stock: United Continental.

Over the last year, the company has gained new directors, a new president, Scott Kirby--who Gerstner called "the most talented leader in the industry"--and a goal of closing the margin gap with its peers. As a result, the company should be able to double its EPS between 2016 and 2020, Gerstner estimates. No mention of the recent United scandal involving a video showing a passenger dragged off a plane.

Gerstner on Airlines: Really, It's Different This Time

Brad Gerstner is making an argument for the airline industry, which he says has been among the least loved groups among investors over the last 30 years.

“Excess competition has led to atrocious financial results … which has led to near permanent investor skepticism. Everybody in this audience, three generations of investors, have been trained not to be fooled that it’s different this time.”

Yet airlines are actually better off today than they were 10 years ago, Mr. Gerstner argues.

Dramatic consolidation among U.S. air carriers has strengthened companies, “making all the difference.”

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Billions' Bobby Axelrod Makes an Appearance

For fans of the television show Billions, the character Bobby Axelrod just made an on-screen cameo between presenters. No investment ideas, but he's apparently got a challenge for viewers:

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Idea Contest Winner Says Go Long eBay

Up now is the annual investing contest winner.

Dylan Adelman, a Wharton student and a 20-year-old Minnesotan, wins the annual investing competition for an idea that David Einhorn says he wanted to buy as soon as he heard it.

He’s pitching eBay, and says it’s highly undervalued and the market is “completely missing” two reasons for its upside. He sees a 46% upside from current share prices.

The first reason, he says, is the agreement with PayPal, which it spun off in 2015. The agreement, called a merchant of record contract, which is a footnote to a contract he found. (Again, a 20-year-old is speaking). Mr. Adelman says about $8.5 billion in money that is currently going to PayPal will start coming to eBay in 2020 when eBay gets in place the behind-the-scenes payments technology it currently uses PayPal for. He says this is also a reason to short PayPal.

The second reason is eBay’s classified business. which he thinks is worth about $12 billion, assuming big growth, and is misunderstood.

The rest of the business he says he’s being pretty conservative about, including the core markets business and its ticket-selling operations.

David Benoit

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Everyone Loves New Yorker Cartoons

The most popular presenter's prop today appears to be cartoons from The New Yorker. Mr. Einhorn leaned on a couple cartoons to lighten up his presentation about Core Laboratories Inc. And Mr. Gundlach threw one into his presentation as he was discussing his views on passive versus active management. Hey, there are worse ways to please the crowd.

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Tech Investor Gerstner Up Next

Brad Gerstner, founder and CEO of investment firm Altimeter Capital, is up next.

The tech investor’s previous credits include funding Zillow Inc. and HotelTonight Inc., serving as a board member for Orbitz Worldwide and founding Room77, an online platform for hotel search and booking.

Back in 2013, he told the Journal that investors in the travel technology space would be wise to keep an eye on how shifts in regulation would affect emerging companies: “If you’re backing Uber or Airbnb, you have to ask whether you think the regulatory environment will catch up with consumer demand, or if you think regulators will remain intransigent.”

We’ll report back shortly with his latest idea.

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Gundlach: 'Passive investing is a Myth,' Short the SPY; Go Long EEM

That was short, sweet and freewheeling. Mr. Gundlach kept his presentation brief, essentially saying that the uniform view surrounding passive investing is reason enough to bet against the S&P 500.

His call is to go long the relatively undervalued iShares MSCI Emerging Markets ETF and short the SPDR S&P 500 ETF. And to make it fun, he says to make it a leveraged bet.

He backed into the idea by noting that, amid the billions flowing into passive investment funds, “passive investing is just a myth.” He notes that that even indexes such as the S&P 500 rely on a committee to maintain and select stocks. There are “no rigid rules,” he said. “There’s a committee, which means it’s actively managed.”

He shows some slides pointing out that active managers have seen tons of money flow out of their funds while index-trackers have steadily absorbed new money. He then channels Friedrich Nietzsche, amazingly, to make the point that the cyclically adjusted price/earnings ratio popularized by economist Robert Shiller for U.S. stock is historically high. “Some real distortions are taking place.”

He winds it all together by pointing out that the CAPE shows, by contrast, that emerging market stocks are cheap.

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Gundlach Just Opened a Twitter Account

Mr. Gundlach reveals that he opened a Twitter account on the way to the Sohn Conference. There's only one tweet from the account so far.

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Gundlach is Taking on Index Investing

DoubleLine Capital’s Jeffrey Gundlach is diving into the debate around active and passive investing in his unique style.

He kicks off his presentation by juxtaposing two paintings by German expressionist painter Max Beckmann.

The first is a grotesque rendering, called “Night.”

Mr. Gundlach quips that it might better be titled, “Portrait of long-only U.S. equity managers in 2017.”

He then shows a confident self-portrait of the artist.

He then says that this might now be called, “Portrait of equity index managers in 2017.”

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Sohn Snack Break: The $&"@ING Details

This year, Sohn has gone a bit healthy for snacks. Guests are munching on Juice Press products, so that means your fearless Journal team is sharing a bag of something called Vanilla Gladiator Cookies and sipping "Love at First Sight" and "$&"@ING Genius" smoothies.

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Quick Break, Then It’s Jeffrey Gundlach’s Turn

Due up after a short break at Sohn is the frequently colorful Jeffrey Gundlach, founder of bond-focused shop DoubleLine Capital LP, which manages more than $100 billion. Mr. Gundlach has been cautious in recent comments about the dollar and owning rate-sensitive bonds, considering that the Fed is likely to continue to nudge rates higher.

Einhorn: No V-Shaped Oil Recovery Coming

Mr. Einhorn spent a lot of that presentation talking about how Core Lab management has said it expects a recovery in oil prices, but he’s skeptical and also thinks management has lost credibility making that call.

“If he’s right this time, he will have called 7 of the last 1 bottoms,” Mr. Einhorn says in his typical underplayed joke. (His presentation is littered with New Yorker cartoons, which is how you should imaging Mr. Einhorn delivering jokes.)

He also says that view is leading company to buy back shares, which he doesn’t expect to pay off given he thinks the stock is about to fall 45%.

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Einhorn: Core Lab Worth $62 a Share

And there’s the clarity: Mr. Einhorn says the stock is really worth $62, a 45% decline from today’s price.

He says the earnings are going to disappoint in coming years, and bases the $62 on a figure of $3.50 EPS, which he doesn’t see coming for several years still.

The stock is down sharply on what has suddenly become the most active trading day for the shares in more than two years. We've reached out to Core Lab for comment and will provide their response in this space if we get it before the day is done.

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Einhorn Says Offshore is Problem for Core Lab

David Einhorn says Core Lab relies heavily on international growth and projects, but its revenue has sunk as big global companies have had to cut back on capital spending, particularly offshore.

Core Lab gets 50% of its revenue and likely more of its profits from offshore assets, not shale gas projects which are actually growing and which the market seems to believe is its business, Mr. Einhorn says.

He tweaks Core’s management for hyping up businesses and says that it’s leading investors astray. He says the company is exposed to the least-desirable parts of the entire oil market.

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Einhorn Tackles Core Laboratories

David Einhorn is speaking now, a man who has gotten a lot of his fame from the presentations he’s given at this conference over the years.

This year, he gets right to it: Core Laboratories, ticker CLB, a company that provides analysis for petroleum industry drilling. He isn't totally clear about the direction of his bet at first, but he sounds bearish on the stock's value, with a joke about “enhancement” and Viagra that, ah, takes the audience a second to get.

He says the stock trades at a massive premiums to peers. He says there’s a misunderstanding about Core Lab being a secular growth company, but it isn’t. He says the stock ran up thinking it wasn’t cyclical, but that earnings have sunk and analysts were wrong.

From Core Laboratories: "As a matter of our policy and practice, we do not comment on individual opinions regarding our company or the industry."

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A Short History of Tesla Bets

Circling back to Mr. Palihapitiya briefly, it's worth noting that he is the latest in a long line of big-name investors to weigh in on Tesla Inc., though his call is admittedly a bit different than many of the others.

At last year's Sohn conference, Jim Chanos, founder and managing partner of Kynikos Associates, took a jab at Tesla, though it wasn't his main pick. He's long been short the stock.

David Einhorn, the president of Greenlight Capital Inc., who is presenting Monday, has also spoken out against the stock.

Mr. Palihapitiya took a more upbeat view of the company than they did, but he's betting on a particular security that comes with downside protection. Big investors like mutual funds and hedge funds have been into the convertibles, which are bonds that can be exchanged for stock.

So what did that do to the convertibles on Monday? Their prices have been bouncing around a bit this month. According to MarketAxess, they traded today at 111.374 cents on the dollar, up from 107.682 on May 4, though they traded above 115 on May 1.